Rideshare companies in California have now been ordered by an appeals court to reclassify their drivers as employees, threatening to upend the very foundation of the gig economy business model that offers flexibility and freedom to workers and businesses alike. Yesterday’s ruling by the California Court of Appeal upholds the injunction granted several months ago by a state court judge in San Francisco against the two biggest ridesharing companies in the country. But once again there is a silver lining to yesterday’s developments that provides a glimpse of hope for these businesses and gig economy companies in general – the order will not go into effect immediately, meaning that a ballot measure that will be decided on Election Day could permit their business models to survive despite the judicial setback.
The Department of Labor has turned down Congressional calls to extend the time period to receive public comments about the proposed independent contractor rule that would make it easier for gig economy businesses and other hiring entities to avoid federal misclassification claims. Yesterday’s announcement means that the agency remains on track to close the comment period on October 26, with a final rule to be released soon thereafter.
Gig economy companies across the country had a whirlwind September, as legal developments impacting their business models continued to unfold. Here are the five most significant workplace law developments in the gig economy world from the past month.